After getting over the shock of the size of our latest Portuguese tax bill, I was excited to read in the Portugal News recently that it is possible to pay less tax in Portugal. Well, not less tax as such, but less to the tax man. The concept is a simple one – you complete your annual tax return and tick a box stating that you wish to give 0.5% of the total to a charity or religious institution.

I got straight on the phone to our accountant who confirmed that it really was that easy. Once the relevant box was ticked, all we had to do was pick an organisation from the authorised list. That was it. It may have been the first time I felt good about having to pay a tax bill!

According to Paulo Alves, who is campaigning to raise awareness of the scheme, €7.14 million was donated to charitable and religious institutions in this way from the 2011 tax year, with 900 organisations applying to receive donations. This year, the number of organisations applying has doubled, as the scheme grows in popularity.

With 4.9 million tax declarations submitted for the 2011 Portuguese financial year, it seems that awareness amongst the tax-paying public certainly needs to be raised. The scheme provides a means of giving to charity without individuals paying out any more than they would have done anyway – the cash is essentially just re-routed to good causes.

If you want to know more about the scheme and take part to benefit one of Portugal’s charities, just ask your accountant when completing your Portuguese tax return and choose the organisation that you would like to donate 0.5% of your bill to. It’s a simple gesture, but the more people that do it, the bigger the difference we can all make.

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